Periodic updates on developments in disability law and related fields.

Wednesday, August 15, 2012

Two New Articles on the Spending Clause and the Healthcare Cases

As both of my readers know (Hi, Mom!), since the day the Supreme Court decided the healthcare cases, I have been saying that the Court's Spending Clause decision was likely to be the most consequential part of the ruling for disability law and lots of other federal statutes. That decision decoupled the Affordable Care Act's Medicaid expansion from the rest of the Medicaid program, and it, for the first time, held that a conditional federal spending program unconstitutionally coerced the states. The Court's decision on the Spending Clause issue was fractured; there was no majority opinion on the question. And Chief Justice Roberts's pivotal opinion itself requires some work to understand. I expect we'll see a fair amount of litigation and scholarship on the question.

Now up on SSRN are two pieces that will begin that conversation. One, my own piece entitled The Anti-Leveraging Principle and the Spending Clause after NFIB, forthcoming this spring in the Georgetown Law Journal, tries to assess what the Court's decision means for Spending Clause doctrine generally. Here's the abstract:

This article offers an initial assessment of the Supreme Court’s Spending Clause holding in National Federation of Independent Business v. Sebelius, which addressed the constitutional challenge to the Affordable Care Act. As Justice Ginsburg pointed out, NFIB marks “the first time ever” that the Court has held that a spending condition unconstitutionally coerced the states. The implications of that holding are potentially massive, and some of the language in the decision, if read broadly, would seriously threaten the constitutionality of a broad swath of federal spending legislation.

Notwithstanding some of the Court’s language, this article contends that the case is not best read as rendering federal spending conditions unconstitutional simply because they are attached to large amounts of federal money, change the terms of participation in entrenched cooperative programs, or tie together separate programs into a package deal. Rather Chief Justice Roberts’s pivotal opinion is best read as adopting an “anti-leveraging principle” that will find coercion only where all three of these conditions are present at the same time. The anti-leveraging principle both makes the most sense of what the Chief Justice actually said in NFIB and does a better job of accommodating the relevant constitutional values than do alternative readings of the case. Although that principle threatens the constitutionality of far fewer conditional-spending laws than do those alternative readings, it raises challenging questions about the constitutionality of certain spending conditions. And it gives states an important new tool in negotiations with federal administrators.

Of the four discrete questions before the Court in National Federation of Independent Business v. Sebelius, the Medicaid expansion held the greatest potential for destabilization from both a statutory and a constitutional perspective. As authors of an amicus brief supporting the Medicaid expansion, and scholars with expertise in health law who have been cited by the Court, we show in this article why NFIB is likely to fulfill that promise.

For the first time in its history, the Court held federal legislation based upon the spending power to be unconstitutionally coercive. Chief Justice Roberts’ plurality (joined for future voting purposes by the joint dissent) decided that the Medicaid expansion created by the ACA was a “new” program to which Congress could not attach the penalty of losing all Medicaid funding for refusing to participate. NFIB signals the Roberts Court’s interest in continuing the Federalism Revolution. The Court relied on, seemingly modified, and strengthened at least two existing elements of the test for conditional spending articulated in South Dakota v. Dole. Clear notice and germaneness now appear to be folded into the newly fashioned yet undefined coercion doctrine, which relied on quantitative as well as qualitative analysis to determine that the Medicaid expansion was unconstitutionally coercive. The Court is now actively enforcing the Tenth Amendment to protect states from federal spending legislation.

NFIB raises many questions regarding implementation of the Medicaid expansion as well as the ACA. The dockets will experience the reverberations of these open questions, as well as the Court’s invitation to explore the coercion doctrine. Thanks to their success before the Court, states are no longer plaintiffs claiming coercion, powerless with a “gun to the head.” The Court’s decision grants them the option to expand Medicaid or not, leaving them with the difficult political choice upon which the lives of some of our most fragile, disenfranchised citizens will rely. We are plunged into Justice Cardozo’s “endless difficulties.”